News International to close thelondonpaper

News International is planning to close its loss-making free evening newspaper, thelondonpaper.

The company said this afternoon it had begun a month-long consultation with the 60 staff of NI Free Newspapers, the subsidiary that publishes thelondonpaper, over the planned closure. It will continue to publish the paper during this consultation.

Thelondonpaper employs around 40 journalists.

The announcement brings to an end the London freesheet war which began three years ago in August, 2006, when News International committed to launching thelondonpaper and rival Associated Newspapers quickly began producing its own afternoon freesheet, the London Lite, to protect the London Evening Standard, which it then owned.

Planned closure of thelondonpaper has left many wondering about the future of London Lite, which is also loss-making.

A spokesman for Daily Mail & General Trust, which owns Associated Newspapers, said: "We are watching developments with interest."

News International, the British publishing wing of Rupert Murdoch's News Corporation empire, said this afternoon that following a review of the "efficiency and effectiveness" of thelondonpaper, started in the early part of last year, it had decided to "refocus around a set of strategic priorities".

James Murdoch, son of Rupert and chairman and chief executive of News Corp in Europe and Asia, brought in Boston Consulting Group to assess News International's businesses last year.

That review has already lead to 65 editorial job cuts across News International's British paid-for titles, the Sunday Times, the Times, the Sun and News of the World, and to the sale of some non-core operations.

James Murdoch said today: "The strategy at News International over the past 18 months has been to streamline our operations and focus investment on our core titles.

"The team at thelondonpaper has made great strides in a short space of time with innovative design and a fresh approach but the performance of the business in a difficult free evening newspaper sector has fallen short of expectations.

"We have taken a tough decision that reflects our priorities as a business."

Thelondonpaper recorded a pre-tax loss of £12.9m in the year to the end of June 2008 on turnover of £14.1m.

This annual loss was lower than the £16.8m lost in its first 10 months from September 2006 to June 2007.

The company increased the size of its overdraft facility with its banks to £26.9m in the 12 months to June last year from the £13.7m overdraft it held in its first 10 months.

Primarily as a result of its overdraft swelling, debts increased from £18.3m to £31.1m.

The News International's freesheet is handed out every weekday afternoon and evening across central London and has a distribution of just over 500,000, while its rival London Lite distributes just over 400,000 each weekday.

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